Northleaf Eyes Growth Fund Targeting Canadian Health Care, Tech
(Bloomberg) -- Northleaf Capital Partners is launching a growth fund that targets Canadian technology and health-care companies, adding to the $4 billion the firm has raised over the past year for other products, its managing partner said.
Toronto-based Northleaf co-invests in later-stage growth companies as part of its venture capital program and “returns have been very strong from that direct investment portfolio,” Stuart Waugh said in an interview. Canadian investors have expressed particular interest in the strategy, he said.
Northleaf has made direct investments in technology companies such as FreshBooks, a seller of cloud accounting software, and Ecobee, which makes connected thermostats and other home devices. It’s also acquired stakes in numerous other health-related and tech companies through its secondaries business, which buys interests in existing funds run by other managers.
The timing of the new fund’s launch depends on ongoing conversations with investors, but Northleaf is confident that it will have first closing this year, Waugh said.
Demand for alternative assets is skyrocketing as low interest rates and high valuations in the stock market drive investors to other places in search of yields and returns. Bank of Nova Scotia’s global asset management arm said last month that it’s creating a private assets division and plans to launch its first private debt fund by year-end. Quebec’s $310 billion pension manager wants to expand further into private lending in search of attractive returns with manageable risks.
Northleaf, which manages $18 billion across private equity, private credit and infrastructure, has also recently launched an $800 million open-end infrastructure fund.
“The market is becoming more mature and more sophisticated and investors are looking for more specialized options in terms of tailoring and customizing their allocations,” Waugh said. The firm has secured $4 billion in commitments in the last 12 months, leaving it with about $5 billion of dry powder, the managing partner said.
©2021 Bloomberg L.P.